Even if you’re already working with an accountant, it can still be helpful for you, as the owner of the business, to have an understanding of your company’s financial records, and what it takes to ensure that they’re always up-to-date and accurate.
With this in mind, here are some expert tips and best practices for achieving accurate and complete financial records, all year-round:
- Always separate your business and personal finances
One of the first things an accounting firm in Coral Springs will advise you of, is the need to keep your business finances separate from your personal finances. This makes it far simpler when it comes to generating year-end financial reports, and for LLCs, helps to keep you and your business separate in legal terms.
- Track every expense
Helping to provide your accountant with a clear paper trail needed for supporting deductions or tax write-offs, and giving them an accurate picture of all cash outflows, safely storing all receipts for all business expenses, is a must when it comes to proper financial reporting.
- Keep a cash reserve
Suppliers will still need to be paid and payroll will still need to be processed, even if you’re experiencing a financial crunch. This is why it makes sense to maintain a reserve fund for emergencies and unexpected events.
- Be conscious of every tax deadline
Working with an accountant is the best way to never miss another tax deadline, but being aware of them yourself as the owner of a business, is sensible if you want to avoid penalties, late fees or legal consequences.
- Carry out regular accounts reconciliation
Again, if you work with an accountant, they will handle this for you, but ultimately, ensuring that all of your internal records match up with your external statements (such as those provided by banks, vendors and credit card companies), is vital for verifying financial reporting accuracy.
If you don’t work with bookkeeping or accounting services, try to devote time to this task every month (or assign someone else the task), that way you’ll avoid issues or be able to correct them before they become irreversible.
- Organize your records
Receipts, invoices and purchase orders, keeping them in a safe place that you can easily access is essential so that when tax season approaches or an audit, you won’t have to search high and low for the documents you need.
- Keep on top of invoicing
Managing cash inflow requires a structured system, and with this in place, you should be able to send out client invoices promptly, and remind them should payments be overdue.
- Outsource your accounting requirements
Most small businesses don’t have the funds to create their own bookkeeping or accounting departments, or struggle to find the right in-house employees for the job, which is why outsourcing can be so useful.
Outsourced accounting in Fort Lauderdale means that businesses of all sizes can gain access to the kind of talent and expertise they need to stay on top of reporting and financial planning, without it destroying their bottom line.
Accurate and complete financial records are the cornerstone of any successful business, but if you’re not careful, they can quickly slip out of your control; leaving your business open to fines, penalties, and other profit-draining costs most companies could do without. But, by following the tips and best practices outlined above, you can keep your financial records in pristine condition